The Super Committee appointed after the debt reduction fisaco this summer appears unsuccessful. At the heart of the debate over spending and taxes, there is a core ideological difference.
Democrats want to hike taxes. Republicans want to cut spending and forego tax increases, but some committee members like Sen. Pat Toomey (R-Penn.) did agree to certain changes in the tax code that would have generated more tax dollars. Democrats refused Toomey’s compromise.
Implausibly, the committee ignored Sen. Tom Coburn’s (R-Ok.) report Back in Black.
The taxes vs. spending cuts battle is nothing new. President Bill Clinton sparred often with then Speaker of the House Newt Gingrich over the same principles. In a backgrounder (No. 928) published in 1993, the Heritage Foundation disclosed [boldface added]:
“A Joint Economic Committee report found that every dollar of higher taxes since 1947 has resulted in $1.59 of higher spending. This statistical survey is supported by recent history. Tax increases in 1982, 1984, 1987, and 1990 all were enacted for the alleged purpose of deficit reduction. In every case, however, the deficit rose the following year because lawmakers could not resist the temptation to spend the expected new revenues.”
Gingrich did make history as Speaker by succeeding with his budget balancing goals, but there was a backlash from the status quo, including members of his own party. Some of those Republicans are no longer in Congress; some remain.
Ironically Coburn, who was not a Super Committee member, prepared a well-researched report revealing trillions in potential cuts that would not affect the economy or Main Street in a negative manner.
Coburn’s Back in Black proposal offered $9.032 trillion in cuts. One example of tax loopholes gone awry is the $1 billion in tax breaks for Hollywood movie producers. Others include tax breaks for recipients of the taxpayer funded bailouts. Coburn also found that large businesses were abusing loan programs in the Small Business Administration, disadvantaging small businesses. Coburn noted that the Inspector General found more than $2 billion in improper payments for one type of SBA loan.
Gingrich, now a frontrunner among Republican candidates for president, called the Super Committee “about as dumb an idea as Washington has come up with in my lifetime.” Gingrich said forcing us to choose between gutting our military or accepting a tax increase is like someone asking if you’d rather be shot in the head or have your leg cut off.
Numerous accounts in media suggest the Super Committee might have been given a more apt name—the ‘Stupor Committee.’ Coburn’s Back in Black would have been an excellent guide and the research was already in place, based on data provided by government agencies.